Raft https://paragraph.com/@raft Raft will voyage again Fri, 31 Jul 2026 20:26:41 GMT https://validator.w3.org/feed/docs/rss2.html https://github.com/jpmonette/feed en Raft https://storage.googleapis.com/papyrus_images/52653ba941677521a4a77edbd539c60b9f3cfa285ee057341f734871ac290a68.png https://paragraph.com/@raft All rights reserved <![CDATA[Raft Security Incident: Post-Mortem Analysis and Recovery Plan]]> https://paragraph.com/@raft/raft-security-incident-post-mortem-analysis-and-recovery-plan Mh5dXnXWT7n2c2wWq0II Mon, 13 Nov 2023 12:43:22 GMT On 10 November 2023 at 18:59:23 UTC, Raft encountered a complex security incident, resulting in the minting of ~$6.7 million unbacked R, subsequently, the attacker sold R, causing R's depeg.

A public announcement of the exploit was made on 10 November 2023 at 19:18 UTC.

The Incident

Exploit Transaction: https://etherscan.io/tx/0xfeedbf51b4e2338e38171f6e19501327294ab1907ab44cfd2d7e7336c975ace7

Raft Exploiter: https://etherscan.io/address/0xc1f2b71a502b551a65eee9c96318afdd5fd439fa

Exploited Contract (InterestRatePositionManager): https://etherscan.io/address/0x9ab6b21cdf116f611110b048987e58894786c244

The sequence of actions taken by the attacker was as follows:

  • Borrowed 6,000 cbETH from AAVE via a flash loan.

  • Transferred a total of 6,001 cbETH to the InterestRatePositionManager contract.

  • Liquidated a pre-created position on the InterestRatePositionManager contract.

  • Set the index of the raft collateral indexable token to 6,003,441,032,036,096,684,181, which is the cbETH balance of the InterestRatePositionManager contract and was amplified over 1000 times due to the donation in step 2. (Source: MetaTrust Labs)

Source: MetaTrust Labs
Source: MetaTrust Labs

  • Minted 1 wei share with only 1 wei cbETH, exploiting the divUp function's behavior.

Source: MetaTrust Labs
Source: MetaTrust Labs

  • Repeated step 5 sixty times to acquire 60 wei shares, equivalent to 10,050 cbETH.

  • Redeemed 6,003 cbETH with only 90 wei rcbETH-c.

Source: MetaTrust Labs
Source: MetaTrust Labs

  • The 6.7m R minted was swapped for 1575 ETH (worth $3.6M) through the following pools:

    • R/sDAI on Balancer: 2.1 million R for 2 million sDAI,

    • R/DAI on Balancer: 1.2 million R for 1.15 DAI, and

    • R/USDC on Uniswap: 200,000 R for 86,000 USDC.

Source: MetaTrust Labs
Source: MetaTrust Labs

  • Burned 1,570 ETH

Source: MetaTrust Labs
Source: MetaTrust Labs

Root Cause

The primary root cause was a precision calculation issue when minting share tokens, which enabled the exploiter to obtain extra share tokens. The attacker leveraged the amplified index value to increase the worth of their shares, allowing them to redeem a nominal amount of rcbETH-c for a significant quantity of cbETH and subsequently borrow substantial amounts of R.

Audit Status

The exploited Raft smart contracts were audited by Trail of Bits and Hats Finance. Unfortunately, the vulnerabilities that led to the incident were not detected in these audits.

We are committed to working closely with the community to enhance the security measures and reinforce the resilience of Raft and the crypto ecosystem as a whole.

Post-Incident Actions

A police report has been filed and we are working with law enforcement, centralized exchanges, and other parties to identify the attacker.

We are working on a detailed recovery plan to compensate all users affected by the incident as much as possible and in the fairest way.

A public announcement was issued on 11 November 2023, urging all Raft users to await further updates regarding the recovery plan.

To mitigate further risks, all Raft smart contracts were temporarily paused on 10 November. However, users who have minted R retain the ability to repay their positions and retrieve their collateral.

Upcoming Steps

Raft will release an in-depth recovery plan this week, outlining the steps to address the situation and provide redress for affected users. The Raft community will have the opportunity to provide feedback on the proposed recovery plan before it is concluded and the recovery plan is executed.

]]> raft@newsletter.paragraph.com (Raft) <![CDATA[Introducing the RAFT Bond Program Powered by Bond Protocol]]> https://paragraph.com/@raft/introducing-the-raft-bond-program-powered-by-bond-protocol ht3GRtm7zzjFESfChjUS Mon, 30 Oct 2023 13:56:22 GMT In the ever-evolving world of crypto and DeFi, innovative solutions continually emerge to address the challenges faced by projects in the space. Today, we are thrilled to launch our inaugural bonding program, powered by Bond Protocol’s battle tested permissionless infrastructure.

Here's what you need to know.

What is Bond Protocol?

Bond Protocol made its debut on 3 October, 2022, with a mission to drive sustainable treasury growth for crypto projects. Their suite, which has quickly gained traction in the space, currently includes two major products:

  1. Permissionless Bonds - Operational on Ethereum, Arbitrum, and Optimism.

  2. Options Liquidity Mining - Available on Ethereum and Arbitrum.

    To date, Bond Protocol has overseen more than $60 million in bond purchases and has built a reputation for reliability, having undergone audits by Sherlock, Zellic, and yAcademy.

How do bonds work?

Bonds operate on a straightforward principle. They enable protocols to issue vested tokens to secure strategic assets. Here's a simplified breakdown:

  • Bond Investors deposit an asset, called the quote asset.

  • In return, they receive another asset, known as the payout asset, at a discount relative to its market price.

  • The payout asset isn’t handed over instantly. Instead, it's vested over a predetermined number of days.

    In Raft's case, the bonds will be issued with R as the quote asset and RAFT as the payout asset. The bonds will be vested for 5 days and will have a maximum capacity of 2,000,000 RAFT.

    If you want to familiarize yourself with the steps required to purchase a bond, you can check the official Bond Protocol documentation here.

Advantages of Using Bonds

Raft’s decision to adopt bonds is multifaceted. Bonds offer:

  1. Treasury Diversification: Enabling projects to manage and diversify their treasury assets.

  2. Liquidity Ownership: Providing a tool for managing liquidity and controlling its distribution.

  3. Emissions Management: Facilitating the management of token emissions and distribution.

  4. Strategic Asset Acquisition: Efficiently acquiring strategic assets for the project.

    Investors also stand to gain too as they have an enticing opportunity to obtain RAFT at a price lower than the prevailing market rate.

The Pricing Mechanism for Bonds

To ensure fairness and prevent any undue market influences, Raft has chosen the Sequential Dutch Auction (SDA) method for bonds pricing. Here's what this means:

  • The discount on RAFT’s market price will escalate progressively until a bond purchase happens. After a purchase, the discount will decrease proportionately based on how large the purchased amount is compared to the bond maximum capacity.

  • The discount could also turn negative (the payout asset is sold at a price higher than the market price) but it keeps increasing over time until the next bond purchase.

  • Both the daily discount and the number of RAFT tokens accessible for a single transaction have caps. This approach is to deter substantial RAFT token sales at significant discounts.

    If you want to familiarize yourself with how the Sequential Dutch Auction mechanism works, you can check the official Bond Protocol’s Medium post here.

In essence, Raft's introduction of bonds, powered by Bond Protocol, marks a significant step forward in our journey. It not only reaffirms Raft's commitment to innovation but also presents a mutually beneficial opportunity for both the project and its investors.

Get started with the RAFT Bond Program: https://app.bondprotocol.finance/#/market/1/135

If you want to dig deeper into the bond’s mechanics, you can find the official Bond Protocol documentation here.

Useful Links

]]> raft@newsletter.paragraph.com (Raft) <![CDATA[Unlocking the RAFT Airdrop: Wave 1]]> https://paragraph.com/@raft/unlocking-the-raft-airdrop-wave-1 f4ZI3kSMin4UBjQE1tWZ Tue, 10 Oct 2023 14:01:34 GMT The wait is finally over!

We’ve outlined the complete eligibility criteria for Wave 1 of the RAFT airdrop! Dive in to discover if you have qualified for the RAFT airdrop and how you can claim your tokens.

RAFT Airdrop Details

  • Allocation: 1.5% of the total RAFT supply (37,500,000 RAFT tokens).

  • Token Contract Address: 0x4C5Cb5D87709387f8821709f7a6664f00DcF0C93

  • Snapshot Date: 28 September 2023, at 16:30 UTC (Mainnet block: 18235432).

  • Eligible Wallets: 604 wallets have qualified for Wave 1.

  • Claiming Starts: 11 October 2023, at 12:00 UTC.

Eligibility criteria for the Airdrop

The RAFT airdrop distribution for Wave 1 can be seen here:

When to claim?

Users will be able to check their eligibility for Wave 1 of the RAFT airdrop from 12:00 UTC, 11 October 2023.

Where to claim?

The Wave 1 airdrop will be live at https://claim.raft.fi/. The claim page will go live at 12:00 UTC, 11 October 2023.

How to claim?

All airdrop recipients will be able to claim their RAFT airdrop and have the option to easily stake to get boosted RAFT rewards by following these steps:

  1. Connect your wallet to RAFT claim page 

  2. Check your wallet eligibility

  3. If eligible, click on next to get an overview of RAFT staking

  4. Select the preferred staking period (up to 2 years)

  5. Review your transaction

  6. Claim and stake your airdrop

Get all the details on RAFT staking here.

Useful Links

]]> raft@newsletter.paragraph.com (Raft) <![CDATA[Unveiling Raft's LP Staking Mechanism]]> https://paragraph.com/@raft/unveiling-raft-s-lp-staking-mechanism 4gZ3c19TK4D2hDnJEt0u Mon, 09 Oct 2023 11:17:12 GMT In our previous blog, we introduced RAFT tokenomics, providing a brief glimpse of how veRAFT fosters community engagement and long-term commitment.

Let's dive deeper into veRAFT's mechanics and discover the benefits it offers to the community.

RAFT Use Cases

RAFT serves two primary functions within our ecosystem:

  1. Staking: RAFT token holders can provide liquidity into the RAFT/R 80:20 Balancer pool and stake their Balancer LP token (BPT) into the Raft staking contract for up to 24 months.

  2. Governance: RAFT token holders who stake their RAFT Balancer LP tokens receive veRAFT, which can be used to participate in the protocol decisions through governance voting, shaping the future of Raft.

In the future, the Raft DAO can explore the possibility of sharing protocol revenue with veRAFT holders as the Raft protocol gets further into its path to sustainable profitability.

The choice of an 80:20 Balancer pool is twofold:

  • Ensuring a well-capitalized 80:20 pool guarantees ample on-chain DEX liquidity for seamless RAFT trading

  • Pairing RAFT with R contributes to bolstering R's buying pressure, positively impacting its peg stability

RAFT Token Staking

Users interested in staking their RAFT LP tokens can choose staking periods ranging up to 24 months.

The RAFT token emissions directed towards RAFT LP Stakers amount to 10% (250,000,000 RAFT) of the total RAFT supply and are evenly distributed over three years.

Mechanics of the Staking Mechanism

The algorithm in the staking contract factors in both the amount of RAFT staked and the duration of the staking period. However, the latter is much more important than the former in determining the voting power and share of emissions a user is entitled to receive!

For instance, a user who stakes $100 worth of RAFT for 2 years could receive up to 1.5x as many emissions and 3x higher APR when compared to another user who stakes $200 worth of RAFT for 1 year. The staking program provides a consistent stream of rewards for users regardless of the amount staked as the time commitment is valued more than the capital commitment.

Wrap Up

The Raft LP staking mechanism promotes active engagement from the community and rewards long-term commitment. By linking governance power to staking duration, the Raft community will be better aligned and benefit from Raft’s long-term growth. Through these measures, we aspire to nurture a resilient, unwavering community of token holders fully committed to the Raft’s success.

Read more here.

Useful Links

]]> raft@newsletter.paragraph.com (Raft) <![CDATA[Raft integrates with Chainlink CCIP]]> https://paragraph.com/@raft/raft-integrates-with-chainlink-ccip tsXPS4G3SHjikXFAwzfn Wed, 27 Sep 2023 11:55:37 GMT We’re excited to announce that Raft is integrating Chainlink CCIP—the industry standard for secure cross-chain interoperability.

Raft will be launching across the Base and Ethereum mainnets, with plans to launch on Arbitrum and more chains in the near future. We’re leveraging CCIP’s Simplified Token Transfer capabilities to help unlock cross-chain transfers of R.

Why CCIP?

We selected CCIP as our go-to interoperability solution because Chainlink has a proven track record of maintaining the highest standard of security and reliability in the Web3 industry. Furthermore, CCIP is backed by the Risk Management Network—a separate, independent network that continually monitors and verifies cross-chain operations for suspicious activity. This additional layer of security is particularly important given historical industry exploits and the billions in user funds lost due to insecure and unreliable cross-chain infrastructure.

R aims to be the stablecoin of choice within the decentralized ecosystem, with deep liquidity across many trading pairs and a stable peg maintained through the Peg Stability Module.

In order to help secure our cross-chain stablecoin transfers, we needed access to a highly secure and reliable interoperability solution. After reviewing various solutions, we selected Chainlink CCIP because it provides a multitude of important benefits and features, such as:

  • Time-tested security and reliability—CCIP’s consensus and interoperability layer is powered by Chainlink decentralized oracle networks, which have already secured tens of billions of dollars for smart contracts and enabled over $8 trillion in on-chain transaction value. CCIP also features additional layers of protection and reliability via the Risk Management Network and Smart Execution.

  • Simplified Token Transfers—CCIP features a plug-n-play solution consisting of audited token pool contracts that handle the complexity of burning and minting or locking and minting tokens across chains. CCIP’s Simplified Token Transfers also have additional security features like Rate Limits, and enable ecosystem partners to easily build new capabilities around a supported token via a single CCIP interface.

  • Flexible and programmable—CCIP messages are programmable, meaning token transfers and arbitrary data transfers can be one atomic transaction. This enables instructions to be passed in the data payload regarding what to do with the tokens once they arrive at the destination chain. CCIP also supports multiple token handling mechanisms on the source and destination chains (e.g., burn and mint, and lock and mint) to open up a wider range of use cases.

  • Future-proof—CCIP is built to support continuous updates, such as the integration of new blockchains, the introduction of advanced functionalities, and the addition of other defense-in-depth approaches to security. Thus,  integrating CCIP eliminates future switching costs should new cross-chain functionalities be required.

What Can You Do With Your R on L2s?

Raft's integration with Chainlink CCIP brings exciting possibilities for your R. We’re integrating CCIP’s arbitrary messaging functionality to give users the ability to send instructions along with their cross-chain transfer, i.e., depositing R into the R Savings Rate to earn an 8% APR on their R deposits.

“We’re excited to integrate Chainlink CCIP to unlock cross-chain transfers of R. Powered by the decentralized Chainlink Network, CCIP will help bring the R Savings Rate to L2 users.”— David Garai, Co-founder

About Chainlink

Chainlink is the industry-standard Web3 services platform that has enabled trillions of dollars in transaction volume across DeFi, insurance, gaming, NFTs, and other major industries. As the leading decentralized oracle network, Chainlink enables developers to build feature-rich Web3 applications with seamless access to real-world data and off-chain computation across any blockchain and provides global enterprises with a universal gateway to all blockchains.

Learn more about Chainlink by visiting chain.link or reading the developer documentation at docs.chain.link. To discuss an integration, reach out to an expert.

Useful Links

]]> raft@newsletter.paragraph.com (Raft) <![CDATA[Introducing RAFT Tokenomics]]> https://paragraph.com/@raft/introducing-raft-tokenomics hRDOY3k5BtcQBynsNk8I Tue, 26 Sep 2023 13:06:57 GMT Raft's journey since its June 2023 launch has been remarkable. Alongside the addition of new liquid assets in Raft v2, the Peg Stability Module and R Savings Rate have been designed to foster $R's growth and stability for its wider adoption in the market.

Following our commitment to decentralizing the protocol, we're excited to announce more details about the RAFT token.

With the RAFT token in place, Raft is set to transition into a fully autonomous, decentralized organization, governed and controlled by its community.

Introducing RAFT Tokenomics

Our token model revolves around the native RAFT token, designed to encourage community participation, enhance liquidity provision, and allow token holders to influence the protocol's governance.

The allocation for 2,500,000,000 $RAFT tokens has been outlined below:

10.00% (250,000,000 RAFT) of the 21.43% (535,800,000 RAFT) included in Ecosystem & Incentives, is allocated to veRAFT staking rewards.

RAFT Use Cases

RAFT token has two core functions:

  • Governance

  • Staking

Token holders can provide liquidity in the Balancer pool and stake their Balancer liquidity pool tokens to get veRAFT. Holders of veRAFT can vote on key protocol decisions to drive the growth of Raft while earning RAFT token rewards.

Understanding veRAFT

Inspired by Balancer's ve8020, veRAFT enhances liquidity provision and rewards in two stages:

  • Users provide liquidity to the RAFT/R 80:20 Balancer pool and receive BPT tokens in return.

  • Users can stake the received Balancer LP tokens (BPT) into the Raft staking contract for up to 2 years. The staking program will distribute 10% of the total RAFT token supply to holders across 3 years.

veRAFT's design encourages immediate participation and long-term commitment. The token stake duration directly affects the governance voting power and the share of the RAFT token rewards. The longer the staking period, the higher the share of rewards the staker will receive.

In the future, the Raft DAO can explore the possibility of sharing protocol revenue with veRAFT holders as the Raft protocol gets further into its path to sustainable profitability.

The choice of an 80:20 pool for RAFT staking provides significant advantages, allowing liquidity providers to maintain exposure to RAFT's potential growth while mitigating the risk of impermanent loss.

Wrap Up

RAFT's innovative tokenomics and LP staking mechanism, combined with the strategic use of the 80:20 Balancer pool, are designed to foster active community participation and long-term commitment. Our ultimate aim is to cultivate a dynamic, resilient, and engaged community of token holders.

We can hardly contain our excitement as we bring this update to our thriving community, now over 10,000 users strong.

Details regarding our token launch are coming very soon, so stay tuned.

Useful Links

]]> raft@newsletter.paragraph.com (Raft) <![CDATA[ Introducing Raft v2]]> https://paragraph.com/@raft/introducing-raft-v2 2ftgr8OgecSnC6HZKUZj Mon, 04 Sep 2023 13:21:20 GMT Welcome to Raft v2: Experience a revamped economic design, improved scalability, and enhanced capital efficiency.

Discover two crucial additions to the Raft ecosystem: The R Savings Rate and the Peg Stability Module.

Start earning a 6% fixed APR on your R now.

Scroll for more details.

What is the R Savings Rate?

The R Savings Rate is an innovative program tailored to foster R’s growth, stability, and utility as a predominant stablecoin, building upon the Dai Savings Rate’s success.

You can now convert your R to RR, the yield accruing ERC20 token of the R Savings Rate. While your RR token balance remains the same, the corresponding R value continues to grow with the R Savings Rate. Currently, you can earn a 6% fixed APR.

Benefits of the R Savings Rate

Earn a fixed yield by participating in the R Savings Rate.

But that’s just the tip of the iceberg! Here’s how you can benefit from the R Savings Rate:

  • Stable & High APR paid in R: The R Savings Rate will be more competitive than what is provided by other stablecoins. Additionally, our 6% APR is paid in R, avoids exposure to price fluctuation.

  • Simplicity: The R Savings Rate ensures users enjoy the freedom of hassle-free staking and unstaking, with no lock-in periods or cooldown intervals. The user interface is super simple, and the contracts have been audited.

  • Cross-Chain Compatibility: Envisioning the future, the R Savings Rate contract is devised to be compatible with subsequent cross-chain deployments. This pivotal step ensures that users can effortlessly deposit R into the R Savings Rate across many chains.

How to Start Earning R

Here’s a quick step-by-step guide to using the R Savings Rate:

  1. Buy R

  2. Go to app.raft.fi/savings and Deposit R

That’s it! You can now earn a 6% fixed yield on your R.

Peg Stability Module

The Peg Stability Module (PSM) is a tool that Raft has implemented to stabilize the price of R, through a hard peg mechanism ensuring it remains anchored at $1.

By facilitating swaps between R and DAI at a fixed rate, the PSM now enables a tight and stable peg for R.

The PSM enables users to perform the following actions:

  • Swap 1 DAI for 1 R: The user deposits DAI and mints an equivalent amount of R. The PSM contract converts DAI into CHAI, which starts accruing yield. This is done when R's price is higher than DAI’s price.

  • Swaps 1 R for 1 DAI minus fees: The user deposits R and receives an equivalent amount of DAI minus a fee. This swap can be executed only if the PSM holds enough DAI in the reserve. This is done when R's price is lower than DAI’s price. To enable the accrual of DAI in the PSM, the fee is set at 100% and it will be lowered over time.

One-Time Fee Vaults Halted

Further borrowing using the one-time fee vaults of stETH and rETH has been halted. All existing borrowers remain unaffected.

As new interest rate vaults go live next week, users will be able to generate R using WBTC, WETH, swETH, (w)stETH, cbETH, and rETH as collateral.

More information coming soon!

Useful Links

]]> raft@newsletter.paragraph.com (Raft) <![CDATA[Raft Monthly Recap: July 2023 🚣‍♂️]]> https://paragraph.com/@raft/raft-monthly-recap-july-2023 Uuw6ZDWuueIsMrHInWdy Wed, 02 Aug 2023 12:59:29 GMT Oars up, Rafters! 🌊

Welcome back to another edition of our monthly newsletter where we'll sail through all the progress and achievements at Raft during July 2023.

Let’s dive in straightaway!

Market Growth

We’re happy to share that Raft’s Total Value Locked (TVL) has continued to remain above the $50 million mark, with the market capitalization of our R stablecoin reaching $30m.

R has been live for less than 2 months, and the stats, when compared to its competitors, look like this:

We now have 515 holders of R. Number go up only!

Governance

The Raft Governance Forum is live and a lot of proposals have been submitted over the past two months. Here’s a snapshot of our forum.

Open an account and have your say in the future of Raft. 

Liquidity Boost

LPs in the R/DAI <> sDAI boosted pool will soon be able to benefit from the DAI Savings Rate (DSR) 3.49% yield while continuing to provide users with the ability to swap between R and DAI. 

Incentives in the $R / $DAI pool now account for 6.87% of all $BAL emissions!

One-Step Leverage

Say bye-bye to manual folding and welcome one-step leverage (OSL) on Raft! All stETH and wstETH holders who have been leveraging their staking rewards can maximize their returns by up to 6x using OSL.

Stable Summit and EthCC

The Raft team was present at Stable Summit and EthCC meeting our existing partners and exploring exciting collaborations with potential partners.

Our CEO, David, gave a demo on how to use Raft’s One-Step Leverage (OSL) at Stable Summit. 

David also joined a panel discussion on how to build a truly censorship-resistant stablecoin. 💪

We had a lot of cool swags to offer and some fun games to play at the booth!

Media and Twitter Spaces

Over the past month, we’ve been a part of several Twitter Spaces where we dived deep into Raft and also spoke about the LSDFi landscape on many panels. 

Check out some of the Twitter Spaces last month. 

By the way, DeFiLlama is now tracking R

Grants

We have several grants available for anyone who wants to be a part of this growing ecosystem

As we continue to navigate the exciting landscape of DeFi, Raft remains committed to innovation, community involvement, and building a robust ecosystem. 

We invite you to stay tuned for more updates, engage with our vibrant community, and be part of shaping the future of Raft.

Thank you for being an integral part of our journey!

]]> raft@newsletter.paragraph.com (Raft) <![CDATA[Maximize Your Yield: One-Step Leverage Is Live!]]> https://paragraph.com/@raft/maximize-your-yield-one-step-leverage-is-live t4rFPIRdpyK1bBKGI21A Fri, 14 Jul 2023 15:07:43 GMT We are delighted to introduce a game-changing feature: One-Step Leverage (OSL). 

This feature is designed to simplify your DeFi experience and amplify your earning potential. Let’s dive into more of the details.

What is One-Step Leverage (OSL)?

One-Step Leverage is a novel feature allowing users to reach up to 6x leverage in a single transaction, allowing you to increase your potential earnings from your liquid staking derivatives (LSDs).

With OSL you can easily adjust or deleverage in just one click, providing you with greater flexibility and control over your collateral.

OSL: Level Up Your DeFi Experience

Existing Defi lending protocols require users to perform loops to achieve leverage by depositing collateral, swapping the borrowed asset for more collateral, and repeating over dozens of times to achieve the same leverage as OSL.

This presents obstacles such as operational complexities and frontrunning risks. OSL revolutionizes this by offering a streamlined and efficient path to leverage.

With OSL, you can boost your LSD yield to over 20% while benefiting from a 0% ongoing borrow interest rate with a super attractive 0.01% flash mint fee.

Additionally, OSL reduces gas fees compared to traditional methods because it only involves one swap rather than multiple swaps.

Benefits of OSL

The OSL feature offers an array of benefits to all stakeholders:

  • For Liquid stakers: Increased trading volume on their LSD pools, and potential growth in LSD deposits.

  • For Borrowers: The expansion of the borrower base on Raft, which can absorb more redemptions and redistributions.

  • For Liquidity Providers (LPs): More R trading volume translates to increased trading fees.

You can try one-step leverage by clicking here.

Wrap Up

Introducing One-Step Leverage is a testament to our dedication to innovation and user experience.

It is a giant leap forward in our mission to enhance the capital efficiency, user experience, and flexibility of DeFi lending.

Stay tuned as we roll out revolutionary features and improvements that keep Raft at the forefront of the DeFi lending space. Happy leveraging!!

How to contribute

Join our journey! Contribute to Raft's growth and apply for a Raft Grant. 

From writing Twitter threads to developing frontend interfaces, your skills can help shape Raft's future.

Check our Grants page for more details and application guidelines. We can't wait to see your contributions!

Useful Links

]]> raft@newsletter.paragraph.com (Raft) <![CDATA[Raft Monthly Recap: June 2023 🚣‍♂️]]> https://paragraph.com/@raft/raft-monthly-recap-june-2023 iwe2sfG3YK1oyvmMyq2U Tue, 04 Jul 2023 13:35:25 GMT Ahoy, Rafters!

Welcome to our first monthly update, where we'll share the exciting progress and achievements in the Raft ecosystem since our launch on June 5th, 2023.

Every week has brought us closer to significant milestones, and we're thrilled to have you on this journey with us.

Let's dive into the highlights

Market Growth

We're proud to announce that Raft's Total Value Locked (TVL) has exceeded $65 million, and the market capitalization for our R stablecoin has surpassed $33 million.

These milestones demonstrate the growing trust and adoption of Raft within the DeFi space.

The number of R holders has grown to more than 267 over the last few weeks.

Raft holds a 10% market share out of the $650m LSDFi market. Check out DeFi Mochi’s dashboard.

Governance

At Raft, we prioritize decentralization, transparency, and community involvement.

To facilitate this, we launched the Raft governance forum, where community members can actively participate in discussions, propose ideas, and contribute to shaping the future of Raft.

We're thrilled to see multiple proposals and ongoing discussions within the forum.

Open an account and have your say in the future of Raft.

Multi-Collateral Stability

In line with our commitment to robustness and versatility, we successfully approved the proposal to add rETH as collateral, making R a multi-collateralized stablecoin supported by both stETH and rETH.

This expansion strengthens the stability and resilience of the Raft protocol.

Liquidity Boost

The increasing popularity of R has led to significant growth in liquidity pools on platforms like Balancer and Maverick.

For example, the R/DAI pool on Balancer has witnessed a remarkable trading volume of nearly $1.9 million in the last 24 hours.

Data Reliability

To provide our users with reliable and transparent data, we have integrated with industry-leading oracle providers, Chainlink and Tellor.

This integration enhances the security and trustworthiness of Raft's data feeds, ensuring a robust foundation for our ecosystem.

Community & Events

Join the Raft guild today and discover exclusive roles available for R generators and holders. You can also collect your Galxe OAT if you have the “R HoldeR” role on Discord.

Additionally, stETH and rETH holders can claim their respective roles on our Discord server by joining the Raft Guild.

Stay engaged with the Raft community, participate in discussions, and enjoy exclusive benefits.

Our founder, David Garai will be speaking at Stable Summit in Paris.

Media and Twitter Spaces

We've had the privilege of being featured in various media outlets and participating in insightful discussions.

Highlights include:

Grants

Congratulations to our grant recipients who have contributed to the Raft ecosystem through the Zapper integration and the creation of Dune Analytics Dashboards. Check the dashboards here:

We have more grants available for anyone who wants to be a part of this growing ecosystem

As we continue to navigate the exciting landscape of DeFi, Raft remains committed to innovation, community involvement, and building a robust ecosystem.

We invite you to stay tuned for more updates, engage with our vibrant community, and be part of shaping the future of Raft.

Thank you for being an integral part of our journey!

]]> raft@newsletter.paragraph.com (Raft) <![CDATA[Introducing rETH: A New Liquid Staking Token Joins Raft]]> https://paragraph.com/@raft/introducing-reth-a-new-liquid-staking-token-joins-raft 4WMWOnVB1cQYOkXAHgu8 Tue, 27 Jun 2023 15:06:24 GMT We are thrilled to announce the integration of a new liquid staking token (LSD), rETH, into Raft. 

This addition aligns with our commitment to offer our users a growing range of liquid staking assets. rETH, by Rocket Pool, represents staked ETH and brings unique features to the table.

Rocket Pool and rETH

Rocket Pool is a decentralized ETH staking solution that aims to make ETH staking more accessible and efficient. 

Through its innovative platform, Rocket Pool allows users to earn rewards on their ETH without the need to run a full node. 

rETH (Rocket Pool's staked ETH) represents a tokenized share of staked ETH within the Rocket Pool network. It's a liquid staking token that can be traded, used as collateral, or employed in other DeFi applications.

In a recent Twitter poll, our community voted rETH as their top collateral to add to Raft.

Why are we Adding rETH to Raft?

After formally checking with our community in a governance discussion, the team started working to add rETH with the goal of diversifying Raft’s collateral base, reducing the risks of having a concentration of a single type of collateral, until now stETH from Lido. 

rETH presents a robust market with significant value, making it a viable candidate for collateral. 

Initially, it will have conservative parameters, including higher borrowing and redemption fees, due to its currently lower liquidity compared to stETH. 

However, these parameters can be adjusted as rETH's market presence strengthens. 

The integration of rETH into Raft is designed to benefit users, and community feedback is invited to ensure optimal incorporation within our ecosystem.

rETH Meets Raft: A Powerful Combination

The integration of rETH into the Raft protocol opens up new avenues for capital efficiency and financial freedom. 

Here’s what you can expect:

  • Diverse Collateral Options: With the inclusion of rETH, users can now choose between different liquid staking tokens, including stETH and rETH, as collateral.

  • Enhanced Capital Efficiency: Borrow against your rETH holdings efficiently and pay zero fees on your borrowed R stablecoin, while still earning staking rewards.

  • Robust Decentralization: The addition of rETH strengthens the decentralized nature of Raft and further supports the ecosystem.

One thing to note is that users can only generate R with either stETH or rETH in one position. You can deposit rETH and start generating R in our app. Here’s a step-by-step guide about how to stake ETH using Rocket Pool to get rETH.

User Security in a Multi-Collateral Protocol

rETH and stETH operate independently through separate smart contracts with distinct parameters. The common ground facilitating their interplay is the R stablecoin.

When redeeming R, users are required to choose the pool from which they intend to redeem either rETH or stETH. 

This process ensures a secure and streamlined integration of these assets within the Raft ecosystem, without direct interaction between rETH and stETH or wstETH.

We’ve taken action to audit the new smart contracts to enhance security. Shoutout to @agfviggiano and @0xcuriousapple for their work on our code.

You can follow them on GitHub here and here. 

For an in-depth understanding of the security measures in place and the mechanics of the interplay between rETH and stETH, please refer to our documentation

Wrap Up

Integrating rETH into Raft is a significant milestone, and we're excited about the possibilities this brings to our community. 

We continue to work towards providing you with the best tools and assets for achieving financial freedom in a decentralized manner.

Stay tuned for more updates and happy staking!

How to Contribute

Join our journey! Contribute to Raft's growth and apply for a Raft Grant. 

From writing Twitter threads to developing frontend interfaces, your skills can help shape Raft's future.

Check our Grants page for more details and application guidelines. We can't wait to see your contributions.

Useful Links

]]> raft@newsletter.paragraph.com (Raft) <![CDATA[Decentralization: Navigating Raft Closer To The Community]]> https://paragraph.com/@raft/decentralization-navigating-raft-closer-to-the-community ae7PNQWnK10BXdU2sBtT Mon, 12 Jun 2023 14:15:22 GMT Since its inception, Raft has been guided by the vision of a fully decentralized financial system.

Today, we’re excited to share our plans for further advancing this vision, including the launch of our governance forum, taking us another step closer to true decentralization.

Raft Launch

Raft’s launch marked a significant milestone in the DeFi landscape by introducing R, the most capital-efficient USD stablecoin backed by stETH (Lido Staked Ether).

The protocol enables a high degree of capital efficiency, safety, and decentralization, all for the benefit of our community.

Raft’s Commitment to Decentralization

Decentralization is at the core of Raft’s mission.

We believe in a financial system where control and decision-making powers are distributed among its users, fostering an environment of transparency, trust, and resilience.

A decentralized protocol is by its nature less prone to the single points of failure or control that characterize centralized systems.

However, achieving decentralization while maintaining the safety and security of the protocol is not a straightforward task.

Raft's initial governance structure consists of a 3/5 multisig controlled by a combination of Raft and outside members.

We’re also taking steps to progressively decentralize the protocol governance, including through the creation of the Raft Governance Forum.

Raft Governance Forum

As part of our ongoing commitment to fostering an open dialogue and collaboration with our community, we're thrilled to announce the launch of the Raft Governance Forum.

This forum will serve as a space for our community to discuss proposals, voice their opinions, and actively participate in decision-making to shape Raft’s future.

Register and start participating in the discussion here.

Decentralized and Safe

Raft is built on the principles of safety and efficiency. The core parts of our smart contracts are immutable, ensuring the security and stability of the protocol.

Yet, we’re committed to providing a platform where the community has a say in its evolution.

This commitment will be realized through the adoption of a governance-minimized approach, creating an efficient, transparent, and community-driven protocol.

Governance-Minimized Explained

The scope of Raft's governance will be limited to several main areas:

  • Appointment of The Liquidity Committee: The Liquidity Committee will play a crucial role in managing the liquidity of the protocol and ensuring its smooth operation.

  • Treasury Fund Management: The allocation of the treasury funds will be a community decision, ensuring that the funds are used in a way that benefits the entire Raft ecosystem.

  • Protocol Fees: The community will also have a say in the setting of protocol fees, which are critical for maintaining the economic balance of the protocol.

  • Additional collateral types: The community will have the ability to extend the types of collateral that can be used to mint R.

  • Chain deployments: The community will be able to steer the direction of future growth for Raft, including deployments on other chains.

  • Future partnerships and grants: The community will help in the development of business partnerships and integrations, as well as the creation of new grants.

$RAFT: the Governance Token

The RAFT token will be the democratic pulse of the Raft protocol, extending voting power to its holders on pivotal governance matters.

These include decisions related to the governance scope described in the section above, future direction of the Raft product, the allocation of treasury and ecosystem funds, potential partnerships, and the possibility of changes to the RAFT token supply.

Our vibrant community has been the bedrock of our journey, akin to the early pioneers of Raft.

Their belief and involvement has been instrumental in the success of Raft's launch so far and their ongoing support will keep driving its growth in the coming years.

The adventure is just beginning, and we're thrilled to have you join us.

Wrap Up

The road to decentralization is a challenging but rewarding journey. At Raft, we are committed to making this journey with our community.

We look forward to continuing to build a truly decentralized, secure, and efficient protocol, with our users at the heart of every decision we make.

How to Contribute

Contribute to Raft's growth and apply for a Raft Grant.

From writing Twitter threads to developing frontend interfaces, your skills can help shape Raft's future.

Check our Grants page for more details and application guidelines. We can't wait to see your contributions!

Useful Links

]]> raft@newsletter.paragraph.com (Raft) <![CDATA[R You Ready? Raft is Live]]> https://paragraph.com/@raft/r-you-ready-raft-is-live C2m0uWEAqmBQPWN5P89Q Mon, 05 Jun 2023 13:14:49 GMT The moment you've all been waiting for has finally arrived. We're thrilled to announce the launch of Raft on Ethereum mainnet!

Keep reading to learn more about Raft or you can start using the protocol right away here.

What are Raft and R?

Raft is a groundbreaking lending protocol that's changing the game for holders of Lido Staked Ether (stETH). You can generate our stablecoin R using your stETH as collateral.

And here's the best part: you can generate R with a 0.01% nominal fee while continuing to accumulate staking rewards on your stETH collateral. Now that's what we call capital efficiency at its finest!

R is the first decentralized USD stablecoin powered exclusively by stETH. It offers you an unparalleled opportunity to borrow in the most capital-efficient and cost-effective way using your stETH.

With its deep liquidity across an array of trading pairs and unwavering stability, R is poised to redefine the DeFi landscape.

LSDFi season

The Ethereum network has undergone seismic shifts and upgrades over the past year, stirring up a whirlwind of excitement around liquid staking.

Lido has emerged as a beacon of success in this arena, with 78% market share and a market cap of stETH soaring past a staggering $13 billion and still growing.

Now, Raft is seizing the day, offering all stETH holders an enticing value proposition to make the most of their stETH: borrow R stablecoin interest-free, while earning staking rewards.

How to use Raft?

We've built Raft to be as user-friendly as it is efficient.

To borrow R, all you need to do is navigate to the app, connect your wallet, specify the amount of stETH or wstETH you'd like to deposit, and determine how much R you want to generate.

Once you confirm the transactions, you’ll have R in your wallet, and your stETH will be working for you in the background earning staking rewards.

Now you can put your R to use in the wider DeFi ecosystem, starting with providing liquidity on Balancer and Uniswap. Continue reading to learn how!

How to provide liquidity?

We have launched liquidity pools on Balancer and Uniswap.

Liquidity providers can provide liquidity to earn trading fees. In case helpful, here is the R contract address: 0x183015a9bA6fF60230fdEaDc3F43b3D788b13e21.

Let’s go through how to provide liquidity into our current pools:

Provide liquidity on Balancer

There are two liquidity pools on Balancer:

Once you’ve clicked on the pool that you want to enter, look for the "Add Liquidity" section. There you'll need to specify the quantity of R tokens you intend to deposit into the pool, along with the corresponding wstETH and/or DAI tokens.

Once your transaction has been confirmed, you've successfully provided liquidity to the R/wstETH and/or R/DAI pool(s) on Balancer. This means you're now eligible to earn swap fees and BAL rewards.

If you need more information about providing liquidity on Balancer, you can check out the guide.

Provide liquidity on Uniswap v3

You can access the Uniswap v3 R/USDC pool and provide liquidity by clicking “Add liquidity.”

In the liquidity provision interface, you'll find input fields for R and USDC. Input the amounts of R and USDC tokens you wish to contribute to the pool.

We recommend setting a price range of approximately 0.99 to 1.01 R per USDC to maintain the stablecoin's peg. You can adjust this range by moving the sliders or entering the values manually.

If you need more information about providing liquidity on Uniswap v3, you can check out the guide.

Security first

Your safety is our number one priority.

That’s why we have conducted an audit with Trail of Bits, a top smart contract auditing firm in the DeFi space, as well as an audit competition with Hats Finance. You can read more about these audits here and here.

You can also audit the code yourself!

These Github repositories containing our smart contracts are fully open source. We welcome your feedback with open arms.

Frontend operators

Raft embraces decentralization by implementing independent frontends.

Frontend Operators can establish independent frontends to interact with the underlying contracts, in order to enhance the overall user experience.

Alternatively, Frontend Operators can integrate Raft into their own applications, onboarding their users to the Raft ecosystem.

Frontend Operators can apply for grants for their contributions to the Raft protocol. Interested operators are encouraged to contact the Raft team to discuss the details of the grant application process and learn more about available support.

The road to decentralization

Raft will adopt a governance-minimized approach, creating an efficient, transparent and community-driven protocol.

As the core parts of the smart contracts are immutable, the security and stability of Raft is ensured. The scope of the Raft governance, will be limited to three main areas:

  1. Appointment of The Liquidity Committee

  2. Treasury fund management

  3. Protocol fees

You can read more information in the docs. Keep a look out for more announcements about this in the coming weeks!

One-Step Leverage, 11X Yield

There’s a lot more in store in the near future.

The first game-changing feature coming to Raft is One-Step Leverage, which will enable users to gain up to 11x leverage on their stETH in a single transaction.

With this feature, Raft offers the highest leverage on stETH at a cheaper cost than any other major protocol and it does so while seamlessly simplifying the complex and gas-consuming multi step “folding” process required to gain significant leverage elsewhere.

Keep your eyes peeled for more information about One-Step Leverage in the coming weeks!

R you ready?

The path for Raft is clear: increasing the adoption of R, and making it the stablecoin of choice within the DeFi ecosystem.

Raft is an improvement upon existing designs, built to support a rapidly growing liquid staking market. LSDFi is here to stay and Raft is positioned to grow with this market and beyond.

We invite you to try out our platform and start generating R today.

Welcome aboard, and happy rafting!

How to give feedback?

To create the ultimate DeFi experience, we need our users’ valuable feedback.

You can provide feedback by reaching out to the Raft team by opening a support ticket in our Discord server.

We're committed to making Raft better, and your thoughts and suggestions play a crucial role in achieving that.

FAQs

Here are some of the most frequently asked questions about Raft. You can read the full FAQ list on our docs.

If I deposit stETH and mint R, does my collateralization ratio improve as my collateral accrues yields?

Yes. All rewards accrued while your position is open will improve your collateralization ratio over time.

Is there a minimum amount of R that can be borrowed?

Yes. You need to generate at least 3,000 R to open a position. This helps ensure that in case your Position needs to be liquidated, there's enough incentive for others to step in and cover it, maintaining the health and stability of the Raft protocol.

Does Raft only support stETH as collateral?

Yes. At the moment, Raft only supports stETH as collateral. In the future, governance may decide to expand Raft beyond stETH.

Who can liquidate positions?

Liquidations are permissionless so anybody is able to monitor for liquidatable positions and liquidate via the Raft contracts using flash mint or a flash loan on the liquidity venue. See our guides for more information.

What is the minimum collateralization ratio?

Raft has a minimum collateralization ratio of 110%. Any positions below this threshold are able to be liquidated.

How to contribute

Join our journey! Contribute to Raft's growth and apply for a Raft Grant.

From writing Twitter threads to developing frontend interfaces, your skills can help shape Raft's future.

Check our Grants page for more details and application guidelines. We can't wait to see your contributions!

Useful Links

]]> raft@newsletter.paragraph.com (Raft) <![CDATA[Navigating the Currents of Capital Efficiency]]> https://paragraph.com/@raft/navigating-the-currents-of-capital-efficiency pCfFMdUswupmjDwNO2DL Thu, 01 Jun 2023 15:01:16 GMT In the world of DeFi, capital efficiency is the lighthouse that guides every investor's journey. 

Capital efficiency is about maximizing the returns on invested capital and minimizing risk at every stage. Raft has introduced an innovative approach to capital efficiency through its unique stablecoin, R​.

The Pursuit of Capital Efficiency in DeFi

Capital efficiency is the touchstone of DeFi. It revolves around the optimal use of funds, where every asset is put to work to generate the best possible returns. 

Raft's launch of R represents a significant leap forward in the realm of capital efficiency. Backed solely by stETH (Lido Staked Ether), R provides a capital-efficient way to borrow against your stETH, offering deep liquidity and maintaining a stable peg to the USD​.

The Economics of Borrowing R

Borrowing R is straightforward and cost-efficient. After depositing either stETH or wstETH (wrapped stETH) as collateral, users can borrow R with a collateralization ratio of at least 110% for each R borrowed. 

The best part: R can be borrowed for free!

R vs Others

Although R draws inspiration from other stablecoins like DAI and LUSD, it distinguishes itself by adding improvements in several key areas:

  • R is solely backed by staked ETH, offering a more capital-efficient approach to borrowing and lending.

  • R features a more efficient liquidation mechanism compared to DAI and LUSD.

DAI, for example, is a decentralized stablecoin that is over-collateralized with various types of cryptocurrency assets. R improves upon this by using a censorship-resistant asset as collateral that eliminates the risks associated with backing a stablecoin with centralized assets. R also introduces flexible fees, which makes it more attractive for users seeking to borrow against their collateral.

On the other hand, LUSD, a stablecoin issued by Liquity, also offers loans against ETH collateral, which does not accrue any yield to borrowers. R allows users to deposit wstETH as collateral and earn staking rewards without compromising on the intrinsic features that make ETH a perfect collateral asset.

In terms of collateralization ratio, R can be borrowed by posting at least 110% of the borrowed dollar amount as collateral. This ratio makes R as efficient as LUSD and more efficient that DAI.

Like DAI and LUSD, R does not make compromises when it comes to security. All Raft smart contracts have been fully audited by Trail of Bits and Hats Finance.

Wrap Up

Raft's introduction of R is an important milestone in the pursuit of capital efficiency in DeFi. As we continue to navigate the currents of this dynamic financial landscape, it's clear that protocols like Raft are pivotal in steering us toward a more efficient, decentralized future.

DAI and LUSD are stablecoins that paved the way for many DeFi applications, and R improves on them by adding several unique features. Users interested in borrowing against their cryptocurrency collateral should consider their individual requirements and preferences when choosing between these options.

Now it's your turn to set sail. Join us at Raft and experience the benefits of capital efficiency with R.

Jump on board the Raft Discord and get involved in the R-evolution of decentralized finance.

Useful Links

]]> raft@newsletter.paragraph.com (Raft) <![CDATA[Improving DeFi UX: Raft’s Approach to Auto-Conversion of Collateral ]]> https://paragraph.com/@raft/improving-defi-ux-raft-s-approach-to-auto-conversion-of-collateral KZuLERX6Pr7idIVT5lAZ Thu, 11 May 2023 14:11:29 GMT In the rapidly growing world of decentralized finance (DeFi), collateral plays a crucial role in securing loans and ensuring the stability of lending protocols. 

The selection of collateral available to users can significantly impact the efficiency and flexibility of lending platforms.

In this blog post, we'll discuss the role of collateral in borrowing, compare different types of collateral used in DeFi, and examine how Raft's approach to collateral sets it apart from other lending platforms.

Role of Collateral in Borrowing

Collateral is an essential component of lending protocols, as it provides security for loans and reduces the risk of default. 

In DeFi, borrowers must deposit collateral in the form of cryptocurrencies to obtain loans. If the borrower fails to repay the loan, the lender can liquidate the collateral (i.e. sell it for cash) to recover the funds. 

Collateralization ratios are used to determine the amount of collateral needed to secure a loan. They are often set higher than 100% of the loan amount to protect the lender against market fluctuations.

Different Types of Collateral Used in DeFi

Several cryptocurrencies can be used as collateral in DeFi, but not all are created equal. Some of the most common types of collateral include:

ETH:

As the native currency of the Ethereum network, ETH is widely accepted as collateral across many DeFi platforms. 

However, using ETH as collateral comes with some drawbacks, such as exposure to market volatility and the loss of potential staking income.

stETH:

Staked Ether (stETH) is a token representing staked ETH in Ethereum 2.0, that can be redeemed for ETH on a 1:1 basis.  As stETH’s staking rewards are paid in additional stETHs, hence the unit balance is not constant.

As most DeFi protocols require a constant unit balance mechanism for tokens to work, stETH is difficult for the DeFi market to account for and trade.

wstETH:

Wrapped Staked Ether (wstETH) is a token that represents an indexed accumulation of 1 stETH since inception day. The stETH staking reward is accrued within wstETH.  Hence 1 wstETH will always be 1 wstETH but will equate to an increasing amount of stETH over time.

Using wstETH as collateral allows borrowers to have the flexibility to trade on DeFi while still benefiting from staking rewards.

Raft vs. Others

Raft is a decentralized lending protocol that stands out from the competition by accepting and using wstETH as collateral.  

To offer users the best user experience, they can easily borrow R even when they deposit ETH or stETH. Raft's contract will automatically convert all ETH and stETH into wstETH.

Raft's innovative design also allows for capital efficiency, allowing users to enjoy staking returns while simultaneously gaining access to DeFi functionalities, such as collateralized borrowings.

This combination of increased functionality and efficiency sets Raft apart from other DeFi lending platforms, making it an attractive option for users seeking a versatile and reliable borrowing solution.

Wrap Up

Collateral plays a vital role in the world of DeFi lending, and the choice of collateral and automated conversion can significantly impact the success and stability of lending platforms and their users. 

Raft's innovative approach to using wstETH as collateral, and offering users the option to deposit all of ETH, stETH, and wstETH, provides borrowers with the increased functionality and efficiency needed to succeed in the dynamic DeFi landscape.

To learn more about Raft and how to borrow R using ETH, stETH, or wstETH, visit our official documentation and join the conversation in our community channels. Find out more about Raft’s One-Step Leverage.

Jump on board the Raft Discord and get involved in the R-evolution of decentralized finance.

Useful Links

]]> raft@newsletter.paragraph.com (Raft) <![CDATA[Solvency Unlocked: Liquidations and Redistributions]]> https://paragraph.com/@raft/solvency-unlocked-liquidations-and-redistributions pkqVDgIuA4u2vsxezCaY Thu, 04 May 2023 09:58:40 GMT In the thrilling world of decentralized finance, solvency and stability are the dynamic duo that guarantee user trust and adoption.

Enter Raft, a decentralized lending protocol that allows people to take out stablecoin loans against capital-efficient collateral.

Raft’s first stablecoin is called R and is backed exclusively by stETH (Lido Staked Ether). With its eyes set on becoming the number one stablecoin within the decentralized ecosystem, R relies on the powerful tag team of liquidations and redistributions to safeguard its value and maintain solvency.

Let's embark on a journey to understand how these processes work with R.

Liquidations

Liquidations play a vital role in making sure each 1 R is always backed by at least 1 USD worth of wstETH.

An account becomes eligible for liquidation when a Position's Collateral is between the Minimum Collateralization Ratio and 100% collateralization (i.e., 100% < Position's Collateral < 110%).

The liquidation process is initiated when the Liquidator calls the smart contract to perform the liquidation.

The Liquidator pays off the Borrower's Total Debt, and in return, receives the equivalent amount of Matching Collateral and the additional Liquidator Reward, which is based on a pre-defined formula.

Positions below the Minimum Collateral Ratio can be liquidated through the following methods, earning the Liquidator collateral and liquidation rewards:

  1. [Optional Flash Loan]: Borrow Borrower's Total Debt from a Liquidity Pool (such as Balancer).

  2. [Optional Flash Mint]: Flash mint Borrower's Total Debt directly from RAFT.

  3. Call the Liquidation contract, submit Borrower's Total Debt.

  4. Receive wstETH equivalent to Borrower's Total Debt + Liquidation Reward Rate of Excess Collateral.

  5. Swap wstETH back into R.

  6. [Optional Flash Loan]: Repay Borrower's Total Debt of flash loan.

  7. [Optional Flash Mint]: Repay Borrower's Total Debt * (1+FlashMintFee%) of flash mint.

Redistributions

Redistributions serve as a last line of defense in the highly unlikely event that liquidators fail to liquidate all under-collateralized, risky Positions. They are designed to ensure that losses incurred by an under-collateralized position are fairly distributed among all Positions, reducing the risk of systemic failure. This mechanism maintains user trust and confidence in the protocol, making it a vital part of DeFi lending.

If a borrower's collateralization ratio falls to 100% or below, a Redistributor may initiate a Redistribution process, earning a Redistributor Reward.

The remaining collateral and debt of the affected Position are proportionally split among other Positions based on their collateral amounts, with higher collateral amounts receiving a larger share. After the redistribution, the under-collateralized Position is closed.

The Redistributor's role is to invoke the contract for initiating the redistribution process. Due to the potential for high gas fees, an incentive is provided to the Redistributor.

The Redistributor Reward Rate is a dynamic percentage of the Total Collateral, set according to a pre-defined table.

Wrap Up

The mechanisms of liquidations and redistributions are crucial for ensuring solvency and stability in decentralized finance protocols like Raft.

The R stablecoin, designed to always retain a value of 1 USD, relies on these mechanisms to maintain stability and reliability.

By understanding how liquidations and redistributions work with R, users can confidently trade R with minimal slippage or price impact. To learn more about Raft and its features, please visit the official documentation.

Find out more about Raft’s One-Step Leverage.

Jump on board the Raft Discord and get involved in the R-evolution of decentralized finance.

Useful Links

Website: https://www.raft.fi/ Twitter: https://twitter.com/raft_fi Telegram Channel: https://t.me/raft_fi Telegram Group: https://t.me/raft

]]> raft@newsletter.paragraph.com (Raft) <![CDATA[How R Stablecoin Maintains Its Peg in Stormy DeFi Seas]]> https://paragraph.com/@raft/how-r-stablecoin-maintains-its-peg-in-stormy-defi-seas Ytk9IsBLptV8vzb8S1Nl Thu, 27 Apr 2023 10:13:50 GMT In the vast ocean of DeFi, stablecoins play a critical role in providing stability and predictability amidst the turbulent waves of volatility.

Among these stablecoins, Raft's R stablecoin has emerged as a reliable anchor for users navigating the DeFi space.

Let's explore how R maintains its peg and how these mechanisms set it apart from other stablecoin peg mechanisms.

The Importance of Maintaining the Peg

We all remember all too well what happens when a stablecoin loses its peg.

A stablecoin's ability to maintain its peg to a specific value (in the case of R, 1 USD) is essential for ensuring user confidence and facilitating seamless transactions.

A stable peg provides the following benefits for stablecoin holders:

  1. Easiness of use as a medium of exchange

  2. Reduced risk of being liquidated

  3. Easiness of use as a unit of account in DeFi

Let’s explore how R keeps its value pegged to the US dollar.

How Raft Maintains its 1 R: 1 USD Peg

Raft protocol employs several code constraints and tactics to ensure R maintains its 1 USD peg.

We have devised a combined hard peg and soft peg dual system to ensure 1 R remains equal to 1 USD.

These mechanisms work in tandem to create a robust system that helps maintain the R token's value and prevent it from deviating too far from the intended peg.

Hard Peg

The hard peg is achieved through two different and complementary mechanisms:

  • Overcollateralization: users need to provide at least $1.10 worth of wstETH to mint one R token. This results in the price being capped at $1.10, which acts as an upper barrier.

When the price of R rises over $1.10 per R, users have the option to make a deposit of wstETH worth $1.10, mint 1 R, and then sell it on the open market for more than $1.10 to lock in a profit without taking any risk.

The buying pressure exerted by arbitrageurs contributes to increasing the R price up to parity with the US dollar.

  • Redemptions: the redemption procedure establishes a lower boundary for the R price, given that market players are presented with arbitrage possibilities anytime the price of R drops below $1.

In that situation, arbitrageurs can buy R on the open market for less than $ 1 and redeem it for $1 worth of wstETH. When an R token is redeemed by a user, that user's tokens are "burned" via a smart contract.

This decreases the amount of R that is currently in circulation, which causes its price to increase.

Soft Peg

The notion of a "soft peg", as opposed to a "hard peg", depends on the capability of a stablecoin design to motivate users to behave based on the assumption that the peg will be maintained in the future. This is in contrast to the "hard peg" concept.

For example:

When R trades for more than $1, there is no reason for current borrowers to pay back their debts. On the other hand, people who want to use R could benefit by borrowing it and then selling it on the open market.

When R trades for less than  $1, the opposite happens: borrowers are more likely to pay back their debts, and people who want to buy R buy it on the open market and redeem it.

Knowing how an economic system is supposed to work ahead of time provides a self-fulfilling process that makes it easier to trust that the system will work as planned in the future.

The soft peg mechanism also underlines that deviations from the parity are temporary, which makes market players who want to gain from them compete with each other. In turn, this would make these deviations last shorter.

R Advantages vs Other Stablecoins

While other stablecoins use mechanisms such as algorithmic supply adjustments or centralized reserves to maintain their peg, Raft's approach to R offers several advantages:

  • Decentralization: R relies on overcollateralization and redistribution, minimizing reliance on centralized entities or governance intervention.

  • Trustlessness: R's peg mechanisms are transparent and operate autonomously through smart contracts.

  • Resilience: Raft's liquidation and redistribution mechanisms work together to protect the system from severe market fluctuations and potential black swan events.

Another element that makes R one of the most flexible decentralized stablecoins on the market is the redemption mechanism.

Stablecoins that don’t allow for direct redemption employ two main mechanisms:

  • Peg Stability Module (PSM): stablecoins like DAI allow market participants to mint one DAI by depositing another stablecoin and vice versa. However, the MakerDAO PSM includes centralized stablecoins like USDC.

Since such assets are vulnerable to off-chain events such as regulatory enforcement, the PSM could end up having assets whose market value could permanently deviate from DAI’s PSM, resulting in potential bad debt for MakerDAO.

  • DEX liquidity: stablecoins like MIM don’t allow for redemption and don’t use PSM. Users that want to exit their MIM exposure must trade it for other tokens in decentralized exchanges.

The ability for stablecoin holders to exit their position is then extremely reliant on the liquidity available on DEXes.

R overcomes the drawbacks of both mechanisms by ensuring all holders can redeem their stablecoins for $1 worth of collateral anytime, without worrying about asset censorship, depeg events, or lack of liquidity on decentralized exchanges.

Wrap Up

Raft's R token sails steadily in the DeFi seas, thanks to its robust peg maintenance mechanisms.

By leveraging overcollateralization and redemptions to maintain R’s peg, stability and trust are ensured for R’s users.

Now that you have a better understanding of how R maintains its peg, it's time to set sail on your own DeFi journey with Raft.

Find out more about Raft’s One-Step Leverage and how Raft compares to other leverage protocols.

Jump on board the Raft Discord and get involved in the R-evolution of decentralized finance.

Useful Links

]]> raft@newsletter.paragraph.com (Raft) <![CDATA[Raft vs Gearbox: Comparing stETH Leverage Titans]]> https://paragraph.com/@raft/raft-vs-gearbox-comparing-steth-leverage-titans Ahf5o02T0Y1amMQWlOu3 Tue, 18 Apr 2023 13:18:08 GMT In the world of DeFi, various protocols offer different methods for users to generate leverage. 

In this article, we compare Raft's one-step leverage mechanism with that of Gearbox, one of the most established protocols for composable leveraged strategies in the space. 

Our goal is to positively highlight the differences between the two while casting light on their unique features.

Gearbox Overview

Gearbox is a well-known composable leverage protocol with two sides: passive liquidity providers who earn low-risk APY by providing single-asset liquidity, and active borrowers who borrow those assets to trade or farm with up to 10x leverage in a single click. 

Key aspects enabling leverage in Gearbox include Credit Accounts, which "bind" together lenders and borrowers in this equation.

Raft vs Gearbox: Comparing stETH Leveraging Approaches

Barriers to Entry

Gearbox requires users to satisfy certain conditions, such as a minimum $100k borrow and address approval on their governance forum. 

In contrast, Raft only requires a minimum position size of 3,000 borrowed R, making leverage with R permissionless and open to everyone.

Borrow Rate

Gearbox users pay borrowing fees, which are subject to fluctuations in borrowing rates. 

Raft users, however, do not have to pay any borrowing fees, allowing them to maximize their leverage strategy profitability.

Collateral Choice

While Gearbox allows users to deposit various collateral tokens, Raft only accepts ETH, stETH, or wstETH as collateral. 

Raft's design choice focuses on stETH as the most efficient and censorship-resistant collateral available in DeFi.

Liquidation

Raft's liquidation system is more favorable for borrowers and liquidators compared to Gearbox. 

Borrowers lose less of their collateral in Raft, while liquidators earn more for performing liquidations.

Slippage

Raft allows users to choose their slippage tolerance level and know exactly under which conditions the swap is reverted due to market conditions, unlike Gearbox.

Wrap Up

Raft democratizes the leverage process for a wide user base without imposing limitations on borrowed amounts or requiring approval from governance members. 

As the primary "lender", Raft eliminates concerns about liquidity availability and fluctuations in borrowing costs, ensuring a smooth borrowing experience. 

Moreover, Raft implements a robust liquidation system that effectively mitigates the risk of contagion effects and maintains the overall stability of the platform without intervention from protocol governance.

Find here more info about One-Step Leverage.

Jump on board the Raft Discord and get involved in the R-evolution of decentralized finance.

Useful Links

]]> raft@newsletter.paragraph.com (Raft) <![CDATA[Raft: Sailing the Trustless DeFi Waters]]> https://paragraph.com/@raft/raft-sailing-the-trustless-defi-waters 8wCsp5FOTzKo4AcBZCE2 Thu, 13 Apr 2023 09:10:21 GMT In the DeFi ecosystem, security and decentralization are crucial factors that contribute to the success and longevity of a protocol. 

Raft protocol, with its governance-minimized approach and decentralized frontends, offers a perfect blend of immutability and adaptability.

At the heart of the Raft ecosystem lies R, the first Ethereum USD stablecoin solely backed by stETH (Lido Staked Ether). R provides the most capital-efficient way to borrow using your stETH and aims to be the stablecoin of choice within the decentralized ecosystem.

In this blog post, we'll dive into the key aspects of Raft's design and how it promotes a secure, user-centric ecosystem.

Balancing Immutability and Adaptability

Crypto has a long story of arguments pro and against immutability and governance. For example, some argue that protocols that are fully immutable are limited in the number of features that they can improve, risking obsolescence by newer, more flexible competitors. 

In the same way, protocols that are completely open to governance by DAO members or tokenholders can be slow to adapt to market conditions due to protocol politics. Crypto history is full of examples of this issue.

In the worst-case scenario, governance-voted upgrades may turn into changing the original code so much that it opens the gates to malicious actors to find vulnerabilities.

Raft's core protocol, which includes the R stablecoin, is designed to be immutable, meaning that no one can alter key parts or mechanisms within the system. This ensures the security and stability of the platform, as well as the stability of R, which is hard-pegged to the price floor of 1 USD. 

However, Raft's governance does have limited control over adjusting fees. This allows the protocol to adapt to market conditions and user demand while maintaining a secure foundation.

Benefits of Raft's Governance-Minimized Approach

By striking a balance between immutability and adaptability, Raft offers several advantages to its users. 

Initially, the platform could operate with low fees to encourage user adoption. As demand grows, Raft governance can gradually increase fees, enabling the ecosystem to scale and respond to user needs effectively. 

This governance-minimized approach allows Raft to remain agile and user-focused while maintaining robust security and R's stability as a preferred stablecoin.

Empowering Decentralization with Frontend Operators

Raft's commitment to decentralization extends beyond its immutable smart contracts. The platform also empowers Frontend Operators to establish independent frontends for interacting with the underlying contracts. 

Frontend Operators can integrate Raft into their applications, onboarding their users to the platform and potentially earning rewards for their contributions.

Raft encourages Frontend Operators to deploy their frontends on the InterPlanetary File System (IPFS), a decentralized storage solution. IPFS offers secure and censorship-resistant access to Raft frontends, further bolstering the platform's commitment to decentralization and user empowerment.

If a Raft frontend becomes inactive, users will have plenty of alternatives to interact with the protocol, enabling uninterrupted access to stablecoin loans and stETH collateral management.

Wrap Up

Raft's unique blend of immutability, limited governance, and decentralized frontends creates an ecosystem that is both secure and adaptable. 

By focusing on user needs and embracing decentralization, Raft offers a powerful and user-centric platform that is poised for success in the rapidly evolving world of DeFi.

Find here more info on Governance and Frontend Operators.

Jump on board the Raft Discord and get involved in the R-evolution of decentralized finance.

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]]> raft@newsletter.paragraph.com (Raft) <![CDATA[Ethereum Shanghai Upgrade and the Impact on DeFi]]> https://paragraph.com/@raft/ethereum-shanghai-upgrade-and-the-impact-on-defi nzBY17d6vyebpds0gSkP Thu, 06 Apr 2023 11:06:22 GMT In this research article, we’ll explore the impact that the upcoming Ethereum Shanghai upgrade will have on the DeFi ecosystem, specifically the Liquid Staking Derivatives and the decentralized stablecoin market.

The highly anticipated upgrade is set to occur on April 12, 2023, and is expected to be the most significant network update since the Merge.

So, what is the Shanghai upgrade, and why does it matter to investors, Ethereum validators, and the entire crypto community, including Raft and its R stablecoin?

Let’s jump right in!

Unlocking Staked ETH and Staking Rewards

The Shanghai upgrade, also known as the Shanghai/Cappela or Shappella upgrade, will enable the withdrawal of staked ETH (stETH) from the staking contract and claiming of staking rewards. The effective withdrawal of stETH into stakers’ wallet will be enabled by the Lido staking contract upgrade, which will happen after the Shanghai upgrade.

This update removes a major barrier to staking ETH since users can stake and unstake without worrying about withdrawal limitations.

Since the Merge integrated the Beacon chain with the Ethereum network, around 18 million ETH (15% of the circulating supply) has been staked by over 500,000 validators, with payouts to stakers totaling over 1 million ETH.

However, these staked assets and rewards remain inaccessible until the Shanghai upgrade.

A notable 43% of the staked ETH has been deposited through liquid staking derivatives (LSD) like Lido and Coinbase. Many retail users prefer LSDs because they allow earning yield on top of staked ETH without lock-up concerns.

Moreover, staking on LSDs requires as little as 0.1 ETH compared to the 32 ETH minimum for running a node.

Key Features of the Shanghai Upgrade

The three key features that will be delivered with the Shanghai/Capella upgrade include:

  • The ability to update the withdrawal credentials of an Ethereum validator from the older 0x00-type (derived from a BLS key), to the newer 0x01-type (derived from an Ethereum address).

  • Partial withdrawals, or the periodic and automatic “skimming” of earned, consensus layer rewards from an active validator’s balance (over 32 ETH).

  • Full withdrawals, or the reclaiming of an “exited” validator’s entire balance.

Validators with the 0x00 type credentials need to update them as only validators with the new 0x01 type withdrawal credentials will be eligible to make partial or full withdrawals from the Ethereum network.

In terms of withdrawals, every 12 seconds (each slot) all Ethereum validators are scanned to identify the first 16 validators that are eligible for full or partial withdrawal. The ranking of the validators depends on the time the node was set up. A total of 16 withdrawals can take place in each slot.

This means there will be a maximum sell pressure of 54,000 ETH (~$97 million @ $1,800/ETH )

How Will Staked ETH Withdrawals Work?

There will be two types of withdrawals: Full and Partial.

Full Withdrawal:

A validator can leave the Beacon chain by unstaking all of the ETH they have contributed to it, including with their staking incentives, using the complete withdrawal mechanism.

The validator no longer participates in the staking program after the entire withdrawal is finished. Before they can completely withdraw their funds, the validator must start a Beacon chain exit.

Full withdrawals are expected to take a minimum of 28 hours. This includes the time required to exit as a validator which is 5 epochs or 32 minutes (1 epoch is 32 slots; (32*12*5)/60) and the minimum time required to become fully withdrawable which is 256 epochs or 27.3 hours ((256*12*5)/60). Full withdrawals are expected to be longer than this.

Partial Withdrawal:

The partial withdrawal feature enables validators to withdraw any balances that exceed the 32 ETH requirement for running a node.

Validators can choose to withdraw all excess ETH (net of penalties and rewards) and stake them on the network to earn rewards which is otherwise not possible.

The processing time for partial withdrawals will be shorter than for full withdrawal processes.

Based on data from ParaSpace, it is anticipated that 10% of validators will remove their staked ETH after more than one month and that all staked ETH can be withdrawn after more than one year. The purpose of this delay is to emphasize the security of the Ethereum network.

Dominance of Lido, Coinbase, and Rocket Pool

While only 15% of the total circulating supply is staked on the Ethereum network, we believe this number is set to exponentially increase once the Shanghai upgrade has taken place as unstaking will become an easier process.

Today, close to 95% of the staked ETH on LSDs is dominated by 3 players namely Lido, Coinbase, and Rocket Pool.

Some of the reasons that have led to the dominance of Lido among other LSDs include:

  • User-friendly platform: Lido offers a simple and intuitive interface that makes staking accessible to users with varying levels of technical expertise.

  • Liquidity for staked tokens: stETH has the deepest liquidity in the Curve, Balancer, and Uniswap pools. This helps stakers easily exit their position.

  • Strong community and governance: Lido has a robust community that actively participates in the platform's governance. The decentralized nature of Lido's decision-making process allows the platform to be more adaptable and responsive to market needs.

  • Security and transparency: Lido utilizes a decentralized network of node operators to secure the assets being staked. This distributes risk and improves the overall security of the platform. Additionally, Lido's smart contracts are open-source, which promotes transparency and allows users to verify the platform's security measures.

Shanghai Upgrade’s Impact on DeFi

The Shanghai upgrade could potentially reduce the number of validators and the total value locked (TVL) on the Beacon chain as staking rewards are claimed and assets are unstaked.

However, some argue that allowing ETH unstaking will increase the amount staked as more individuals and institutions participate.

Due to a lack of deep liquidity, a large majority of the LSDs so far have not been utilized effectively because of the risk of depeg in the price of the token when compared to ETH.

For example, taking stETH, the most liquid token, it has not been trading at 1:1 on many occasions when there were liquidity issues in the market. This led to a lot of discussions around liquidations due to leveraged stETH positions on mainnet.

The rising popularity of liquid staking derivatives is one reason for this belief. As more stETH holders want to use their tokens to seize opportunities in the decentralized economy, the total addressable market for Raft's R stablecoin expands.

R stablecoin offers an innovative and capital-efficient solution for users to transform stETH into a more productive asset without giving up their yields.

Increased competition among validators may also lead to higher yields for stakers, with Lido likely remaining at the forefront of innovation. Raft's R stablecoin holders will be in a unique position to benefit from the Shanghai upgrade, providing them with a flexible and capital-efficient solution for borrowing stablecoins while earning yield on their stETH.

Conclusion

The Shanghai upgrade is a big event for Ethereum, affecting many areas like staking, the amount of ETH available, competition in staking, and new ideas in the Ethereum staking world.

The upgrade's effect on Ethereum's price in the short term is hard to guess, as it depends on what most validators decide to do with their rewards and unstaked assets. The market is always changing and can be surprising.

However, to make sure the upgrade doesn't cause too much trouble for Ethereum's price, there's a limit on how much can be withdrawn each day.

In short, the Shanghai upgrade brings lots of changes and opportunities for the Ethereum network and its users. Raft is ready to capitalize on this, bringing a more capital-efficient way for ETH stakers to borrow seamlessly and safely.

Find here more info about what are we building on Raft and our innovative features, like One-Step Leverage.

Jump on board the Raft Discord and get involved in the R-evolution of decentralized finance.

Useful Links

]]> raft@newsletter.paragraph.com (Raft)